sharing economy

The “sharing economy” as a lever for City transformation

sharingEconomyCity transformation is a major objective of every city planner. Whatever we refer to more livable cities, efficiency, economic growth, the regeneration of poor or industrial quarters, all these objectives need to engage cities in a process of transformation that addresses not only the urban landscape but also economic, behavioral and cultural structures. 

Traditionally, urban planners have addressed these transformations through direct interventions in the territory with large public works. This has been the most common mechanism used for reshaping cities and districts. 

However, it is no secret that this mechanism, though being highly effective has limitations and needs to be aided by policies that permit and incentive the regeneration of quarters. These policies commonly involve moving part of the population and business to different areas of the city, involving therefore a significant social cost.

Together with the reform of the territory, companies and public organizations are offered tax breaks or other incentives in an effort to motivate them to move to the new areas. However, not only an accurate targeting is almost impossible and sometimes backfires, but the whole process is costly and slow. We confront a typical chicken and egg problem, where companies don’t want to move until there is enough mass to justify it while public resources have to be diverted into the new area hoping for its success.

A major problem in this process is because of the size of the investments associated with the transformation. Certainly, building a hotel in a deprived area, moving a university or a museum are  major investments.

Also, even if a hotel brings tourists to the quarter, it offers many of the services that their clients need, particularly in terms of food and amenities, limiting externalities and hence its transformative capacity of the surroundings.

Are there other, maybe better, ways?

Possibly faster and with lower requirements of investment?

Can the so-called sharing economy bring new tools to the table?

If so, what should Cities do in order to benefit from its contribution?

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What to do with the gig – sharing economy?

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Freelancers in the US account now for around 15M people but the forecast for 2020 rises up to 40% of the workforce or around 60M people.

Two main factors are driving this transformation. On one side Internet and connectivity blurs the difference between employees and  external contractors. Your location and company status doesn’t matter as much as long as you do your job. On the other side, the digital transformation lowers the cost of the tools necessary to perform a job, a laptop or a desktop with an Internet connection is many times enough to start your own venture, whatever this is.

Transforming the hierarchical logic of employees into freelancers has obvious benefits for companies that can organize work in a more flexible way matching the competences needed with the requirements of the task in a more precise way, employing the people that they need only when they need them, etc. 

These incentives are powerful and they will certainly transform what we understand for labor market rendering obsolete many of our old conceptions and structures.

What about employees and the overall society?

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